Ethiopian investment principle has shifted from the principle of reserving and listing those areas for the domestic investor, which includes the government, and leaving the rest of investment areas for foreign investment towards leaving the ‘default’ areas for foreign investment and reserving a few sectors for the domestic investor, says Ermias Wodajo – a Global insight provider.
From 2012 to 2022: Investment Principles Shift
- The Principle: all areas of investment are reserved for domestic investors
- The Exception: only those listed under investment laws and regulations will be reserved for foreign investors
(See Article 8 of investment proclamation 769/2012)
- The Principle: all areas of investment shall be open to foreign investors
- The Exception: only those listed under investment laws and regulations will be reserved for domestic investors.
(See Article 6(3) of investment proclamation No.1180/2021)
For instance, investment regulation No. 270/2012 and its amendment regulation No 312/2014 title reads’ investment areas reserved for domestic investors’ while the new regulation No. 474/2020 preferred a title of ’investment regulation’.
Based on the recent, still effective, regulation No 474/2020, five sectors are reserved for joint investment with the government, thirty-two sectors exclusively reserved for domestic investors and seven sectors for a joint venture with domestic investors. All sectors that are not listed in these categories are open for foreign investment.
In addition, a dynamic shift is made on the term ‘domestic investor’ to be broader to encompass Ethiopian origin foreign nationals. The Investment Proclamation abolished the distinction between Ethiopian nationals and foreign nationals of Ethiopian origin removing sectors that were exclusively reserved for Ethiopian nationals.
Wrote by Ermias Wodajo – a Global insight provider.
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